Assessor Outlines Plan To Comply With Standards

January 23, 2013

Assessor Scott Lemley appeared before the Wetzel County Commission Jan. 15 to introduce his plan to get the county in line with Property Valuation Compliance standards. Lemley's plan includes incorporating Dwight Goff of Goff Appraisals. Besides his business in Parkersburg, Goff has also worked for 35 years with the state tax department.

"Scott had called me about what my recommendations would be about bringing the county in compliance with Property Valuation Commission requirements and standards," Goff stated. "I had done this on contractual basis for a number of counties around the state, and I told him I'd take a look at the condition which (Wetzel) is currently in . . . and after, give him my recommendations."

"What you've got before you is the result of the study I had done; it was a very brief, very preliminary, study," Goff stated of the copies of his report that were presented to the commissioners.

"Over a period of time," Goff stated, "what has happened here . . . is the equalization that the code requires has kind of fallen by the wayside as sale properties have been revalued exclusive of all the other properties in the county. Over a period of time, equalization kind of goes out the window . . . That's going to be the biggest problem in bringing everything up to date; being able to isolate which ones are out of line is the biggest issue."

In his report to Assessor Lemley, Goff stated that his review covered five general areas regarding the valuation of surface real property. Those general areas are: cost study, land tables, neighborhood delineation, sales data entry and validation, and sales ratio.

"Is there anything we should focus on, Dwight?" Mason asked, referring to the lengthy report. "Maybe you could help guide us."

"As I said before," Goff explained, "one of the recommendations which Scott had been given was to completely revalue and revisit everything. This would be an expensive and extensive operation. Although I agree this would fix the problem, I do not know, from what I've seen, that the county is in a situation where that is completely required." Goff continued, "One thing, in your favor, is the size of the county . . . It's a more manageable size. I don't think, from what I've seen, the disruption in equalization in this, has extended too much, from qualify grading of buildings . . . that basically, and effective ages."

Goff further explained, "There are some extremes in some properties, when we were out the other day. We stopped and checked some properties; we saw two or three, which were 40 years old and were essentially three percent within a brand new property. These, coincidentally, were properties that had been sold. Properties beside them did not look like this." He added, "Although I've seen problems, I think they are manageable . . . We can make changes to base tables, land tables, and base building tables," He explained, "We can't correct all problems by changing tables. There are going to have to be changes on property-specific issues."

"We are going to find out," stated Lemley. "My intentions are to keep Dwight under contract for the next three years, to keep my studies going."

Goff explained that it appeared as if there had been some limitations put on some of the former assessor's field personnel. "It sounds like Scott is going to allow them to do some things that they weren't allowed to do before," Goff stated.

"Basically," Lemley explained, "Field people were just doing a drive-by, a spot check from a vehicle." Lemley explained that field personnel were looking at upwards to 60 properties a day, which is a considerable amount for one person to do a day. "You basically need to get out and knock on the door, see if any improvements have been done to the house . . . I don't think that's exactly been done." Lemley added, "It's always good, if you are on someone's property, to let them know who you are and what's been done . . . Hopefully we will get this problem corrected." Additionally, Lemley later added that there had been no data collection for over a whole year. Of the issues he had inherited, he stated, "I don't know if it can be fixed in a year. I don't know if it can be fixed in my four-year term, but I'll work on it."

Goff explained that a number of the issues he found on his own, cursory look, were some of the very same things that the independent contractor had found during the state's equalization study a couple of years ago. Goff explained that there were "quite a number of deficiencies, not just individual items."

"I saw some of those same things, and these are the things that we are going to have to iron out over the coming year, and over the course of this three-year visitation."

"I think the sold verses unsold property is a major violation, is it not?" Lemley inquired.

"Yes," Goff answered. "There's an equal and uniform clause in the tax code that requires everything be valued equally . . . That, in itself, is a pretty significant thing."

Goff approaches this subject in his report: "While the base tables appear to be quite old, the extent to which the county has had a sales-bias in regard to valuation, a practice referred to as "sales chasing," is a serious concern and potentially the greatest obstacle in developing new tables."

"West Virginia State Code and the PVTPC requires all values to be current annually, regardless of the status of visitation." Goff further reported that because of this, cost indexes and land tables need to be kept current every year. He stated that a current cost study could not be located. The latest one appears to have been completed for the 2000 Tax year.

Goff stated that the cost study issue is the "most pressing and immediate problem that needs to be addressed." He stated that a new residential cost study has been started, and with further verification of data, "hopefully will be completed within the next couple of weeks." Goff said that a commercial cost study may be more difficult to complete. "Rural counties often have to rely not only on local commercial construction, but also non-taxable construction costs, data shared with neighboring counties, and residential structures that can be priced through the commercial manual to reflect a commercial index."

As for the second part of the report, land tables, Goff noted the following, "The county has approximately 15,400 parcels separated into 73 market areas or "neighborhoods." It is not clear when the last sales analysis was completed, or that it was ever used after it was completed." Likewise, not only should such an analysis be done annually, but Goff noted that "a farm rent analysis has apparently not been completed for ag-use values for many years."

Goff recommended that a land sales analysis should be completed annually to establish correct market-derived land tables. He added, "Despite a state sales ratio that appears to comply with PVTPC standards, an annual land sales analysis should be completed to verify the accuracy of the current tables." He added that a farm rent analysis should be completed to determine correct ag-use values.

As for neighborhood delineation, Goff recommended the following: "While a detailed review of the neighborhoods and the accuracy of boundary delineations were not made, it is clear that some neighborhoods are too small to stand alone as a market area. Such narrowly defined neighborhoods will never have sufficient sale to generate a sales ratio or give any indication of value level." Goff suggested that there are other neighborhoods that these "small" neighborhoods could be added to. This would "adequately value them." Goff adds that any other changes, consolidation of neighborhoods or creation of any new neighborhoods, will become evident during land sales analysis.

As for sales data entry and validation, Goff made the following recommendations: "it is very important for the sales ratio that as many sales as possible are utilized, but it is also important that those sales that do not represent a proxy for market value are excluded from the ratio. The validity of the sales is also important in an analysis of the market area within individual neighborhoods and in the development of land tables when setting final value." Goff further explains, "it is for this reason that so much attention is given to sales entry and verification by the Property Tax Division in their compliance monitoring. It is also important to remember that the sales codes entered on the CAMA system are not necessarily static, and that once entered, never have to be reviewed again. The codes may need to be changed for a variety of reasons. The field data collector should make reviewing the sales data a normal part of his field work."

Goff urged the following at the end of his "Sales Data Entry and Validation" recommendations: "Care should be taken not to change appraisals solely on the basis of the sale. Such "sales chasing," will impair equalization within the county." Goff noted that this is something state monitors look closely for in their annual monitoring. He added, "Overall improved residential property is required to be within 10 percent of market as measured by the average of all valid sales." In bold font, Goff stressed the following, "Individual sales do not establish the market, and individual properties are not required to be within 10 percent of its sales price. Efforts to bring every property to within 10 percent of its sale should be stopped immediately."

In the final part of his report, Goff stated that "With sales ratios between 95 percent 95 percent and a coefficient of dispersion under six, the immediate impression is that this is a county that is already equalized, at market value, and in little need of further attention." Goff stated that, however, when looking further at the overall level of land tables, a relatively low building cost modifier and the number of effective age overrides, "the ratio begins looking perhaps a little too good." Goff explains that there is a high probability that there is a "valuation bias" in the county that favors sold properties over those that are unsold. Goff explains in detail: "Such a practice will render a sales ratio virtually useless because it will not reflect the market as a whole. Both a field inspection and the Equalization Study indicate a lack of equalization, with some 40-year homes being valued at within three percent of a newly built home." Goff adds that "updating land when the property data has been moving further away from a level of equalization over an extended period of time will be a difficult task."

The commissioners all express utmost confidence in Lemley appointing Goff to help with Wetzel County's compliance issues, with Mason stated, "We have all the confidence in the world in Assessor Lemley. We've worked with him before on the commission. We trust him."

In a statement to the Chronicle on Tuesday, Lemley stated, "Mr. Goff is preparing a study for me on values, and I will take the study, review the information, and decide on the implementation of the study. Mr. Goff is familiar with Wetzel County, and I will implement the study over a number of years." Lemley added, "What has happened with valuing property is not the fault of the citizens of Wetzel County, and as I implement the requirements set forth by the PVC, I will do so in the best interests of the citizens of Wetzel County. Most importantly, I will keep the communication open, available, and transparent."

Additionally, Lemley has reported that Wetzel County's Prosecuting Attorney, Timothy Haught, has written a letter on his (Lemley's) behalf, terminating the contract between retired assessor Ralph Phillips and Tyler Technologies.